Microsoft dropped a bomb yesterday when it announced its acquisition of Activision Blizzard. When/if the deal closes in 2023, it’ll make Microsoft the third largest gaming company in terms of revenue, behind Tencent and Sony. We say “if” because, unlike the Bethesda acquisition, this one already has experts debating whether it’ll run into legal issues or not. With Bethesda and Activision Blizzard combined, Microsoft will own a good chunk of the games industry – something the U.S. regulatory authorities may not exactly be happy about.
Why Microsoft Activision acquisition may go ahead
Microsoft CEO Satya Nadella insists that recent acquisitions aren’t about consolidating the industry, but rather strengthening Microsoft’s position in the tech industry and allowing it to compete with other giants like Facebook. Xbox’s Phil Spencer also said in a statement that Microsoft’s intention isn’t to prevent games from releasing on PlayStation platforms.
David Hoppe, a Managing Partner at Gamma Law, told IGN that the acquisition will be seen as vertical integration similar to the Bethesda deal, and authorities aren’t willing to slap such moves with anti-trust regulations. To counter the argument that this is horizontal integration because Microsoft’s game development arm directly competes with Activision Blizzard, also a game development company, Hoppe said, “It is difficult to apply legal competition principles when the ‘products’ are creative works like video games, each one of which is arguably unique and therefore not in direct competition.”
Opinion: Microsoft Activision deal is questionable at best
Zarmena writes… It’s one thing to acquire individual studios, and another to acquire a major publishing house along with all of its developers and franchises. Microsoft may say that this deal isn’t about Sony or exclusivity, but that’s just PR talk akin to what we heard last time before Starfield and The Elder Scrolls VI were turned into exclusives. It remains to be seen how Sony will respond, but one thing’s for sure, a response is warranted here.
In other news, Battlefield 2042 developer has admitted that fixes are taking too long, and Reddit co-founder has predicted that most games will be play-to-earn by 2027.
